The government's much-delayed auction of 4G spectrum, which will deliver the faster internet speeds and network capacity needed to turn mobile phones into computers-on-the-move for millions more Britons, could raise more than £3bn.

Results from recent European auctions, analysed by Enders Analysis, suggest that prices for the rights to mobile phone frequencies are rising. This round of sell-offs was never expected to match the staggering sums handed over to treasuries during the dotcom boom, when £22.5bn was paid for chunks of the UK's airwaves and £30bn for parts of Germany's.

Predictions ranged from £2bn to £8bn but, following the moderate prices achieved in auctions in Germany, Sweden and Spain over the past 18 months, the UK haul was thought unlikely to go above the lower figure. However, Italy exceeded expectations in September: despite the dark clouds gathering over its economy, the country raised a much-needed €3.9bn (£3.4bn) after 22 days of bidding. Enders has calculated that if the UK spectrum is valued as highly as Italy's, some £3.2bn could be headed for George's Osborne coffers.

Several of the bidders that took part in the German and Italian auctions will be fighting it out for UK airspace. They are Telefónica, which owns O2, Vodafone, and Everything Everywhere, the UK joint venture between Orange and T-Mobile.

"Who is not going to want to pay up out of those big three players, given what they have already done in other European markets?" says Enders telecoms specialist James Barford.

The UK is auctioning 80% more spectrum than in the 3G sale a decade ago. Up for grabs is a 60MHz chunk of "two-way" spectrum, which allows for both sending and receiving, in the 800MHz range; another 140MHz of two-way spectrum within the 2,600MHz band; and a further 50MHz slice in the same band where the signal can be sent in one direction only.

The 800MHz batch is the most valuable. Currently used to broadcast analogue TV, it will be released when all TV sets are switched to digital by 2013. This band is good at getting through walls, so works well in urban areas. It is also cheaper to build a network around, because the signal travels further and needs fewer masts.

Based on the Italian auction, the former TV spectrum alone could raise £2.6bn. Networks desperately need to get their hands on it, because the 3G spectrum they are using to transmit internet or data signals is not very efficient at getting into buildings. And the kind of customers who want to use the internet on their phones are worth looking after, because they spend the most, says Barford: "The people who have smartphones are the most valuable customers, they are most likely using data for a much bigger part of the day than voice, and they are going to choose an operator for the quality of those data services."

A decade ago, networks bet the bank that 3G spectrum, which could carry data between mobile phones for the first time as well as voice, would usher in the era of the internet-enabled mobile. But the cost of using data services was so high, and the handsets so badly adapted to viewing web pages, that it took until 2007, when Apple launched its first iPhone, for customers to venture tentatively onto the net from the palms of their hands.

As numbers from Three's £25-a-month unlimited data tariff show, once price constraints are removed there is no longer anything tentative about use of mobile broadband. In February, Three's iPhone-owning customers used an average of 488Mb of data per month. By August, that number had more than doubled, to 1,173Mb.

Across all networks, the amount of data consumed is rising at around 50% per year, Enders reckons. Three's chief executive, David Dyson, last month predicted his network would reach capacity in the busiest metropolitan areas by the end of next year.

There are some downward pressures on prices, too. Ofcom has introduced measures to guarantee each of the four existing networks will get a minimum allocation, and the reserve price for the smallest blocks is £200m. It has also put caps on the amount of spectrum one network can own.The auction will also significantly bump up the £30m-a-year licence fee paid by O2 and Vodafone, and the £35m a year paid by Everything Everywhere, for 2G spectrum they already own. The new fees will be equal to the lump sums handed over for 4G spectrum, spread over 20 years. The networks will need to temper their bids to avoid a big aftershock.

The final complication is that Ofcom has just torn up the rules. Worried that legal action from either Vodafone or O2 would delay the auction, a new round of consultation will begin at the end of the year. Culture secretary Jeremy Hunt has summoned the UK network bosses to a meeting on 21 November, where he intends to knock heads together to achieve a consensus. Ofcom will announce its final rules next summer, with the bidding set for the fourth quarter of 2012.

Another recession may well be about to hit Europe, but by the end of next year Three's network will be creaking at the seams, and everyone will be under pressure to deliver the faster internet connections 4G can offer.

Analyst Mark James at Liberum Capital has put the UK's 4G auction proceeds at £2.5bn, although that figure does not take the Italian results into account. "That's a finger-in-the-air-number, but these auctions follow a consistent pattern," he says. "Spectrum is a finite resource and the operators always clamour for it."